By Rebecca Melvin
New York, Nov. 7 - ServiceNow Inc. priced $500 million of five-year convertible senior notes after the market close on Wednesday at par with a 0% coupon and a 37.5% initial conversion premium, according to a news release.
Pricing of the Rule 144A offering came at the rich end of talked terms, which was for a 0% to 0.5% coupon and 32.5% to 37.5% premium.
The deal has a $75 million greenshoe.
Bookrunners were Morgan Stanley & Co. LLC, J.P. Morgan Securities LLC, BofA Merrill Lynch, RBC Capital Markets and Wells Fargo Securities LLC.
The bonds are non-callable for life with no puts. They have takeover protection, net share settlement and contingent conversion.
In connection with the offering, ServiceNow entered into convertible note hedge and warrant transactions with one or more of the initial purchasers of the notes or their respective affiliates and will use a portion of the net proceeds from the offering to pay for the net cost of the call spread. The warrant strike is $107.46, which boosts the effective initial conversion premium of the bonds to 100% from the issuer's perspective.
Proceeds are earmarked for general corporate purposes, including potential acquisitions and strategic transactions, and to pay the cost of the convertible note hedge transactions.
San Diego, Calif.-based ServiceNow is a cloud-based IT services company.
| Issuer: | ServiceNow Inc.
|
| Issue: | Convertible senior notes
|
| Amount: | $500 million
|
| Greenshoe: | $75 million
|
| Maturity: | Nov. 1, 2018
|
| Bookrunners: | Morgan Stanley & Co. LLC, J.P. Morgan Securities LLC, BofA Merrill Lynch, RBC Capital Markets, Wells Fargo Securities LLC
|
| Coupon: | 0%
|
| Price: | Par
|
| Yield: | 0%
|
| Conversion premium: | 37.5%
|
| Conversion price: | $73.88
|
| Conversion ratio: | 13.5357 shares
|
| Calls: | Non-callable
|
| Puts: | No puts
|
| Call spread: | Yes, warrant strike $107.46, boosts effective premium to 100% from the issuer's perspective
|
| Takeover protection: | Yes
|
| Net share settlement: | Yes
|
| Contingent conversion: | Yes
|
| Price talk: | 0%-0.5%, up 32.5%-37.5%
|
| Pricing date: | Nov. 6
|
| Settlement date: | Nov. 11
|
| Stock symbol: | NYSE: NOW
|
| Stock reference price: | $53.73 at close Nov. 6
|
| Distribution: | Rule 144A
|
| Market capitalization: | $7.37 billion
|
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